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Ofcom tells C4 it “must form a partnership”

Ofcom has backed plans for Channel 4 to merge or form a “new relationship” with another commercial organisation. It has laid out the plans this morning (January 21) in its report on the future of UK public service broadcasting.

The report recommends that C4 should be a key part of a new organisation that offers a strong PSB alternative to the BBC. It says that “this could be formed by partnerships, joint venture or mergers between C4 and other organisations”, and this would create new value through “cost savings, synergies and new opportunities for growth”.

Ofcom suggests a relationship with BBC Worldwide, the BBC’s commercial arm, or a merger with another company, such as rival broadcaster Five, which is owned by RTL. Earlier this week, C4 chairman Luke Johnson confirmed that he had had talks with RTL and BT about a merger before Christmas.

It adds that a new body would need new governance and accountability arrangements but that any partnership should strengthen delivery of public purposes.

Ofcom says its recommendations aim to take advantage of opportunities created by the revolution in digital media, including broadband and mobile networks, and also aim to address the “profound” changes in commercial broadcasting, including digital switchover and pressure on TV advertising, which will create a shortfall of £235m a year by 2012.

It suggests funding for this could also be available to Channel 4 from the digital switchover surplus, the £130m annual figure that has been allocated from the licence fee to support the transition from analogue.

However, it has rejected previous proposals to “top-slice” the BBC licence fee for PSB programmes or services.

Meanwhile, the plans support the BBC’s role “at the heart of PSB” and says it should retain this position through the licence. It also reduces PSB commitments for ITV and Five so both can be freed up to make “entertaining, engaging UK content”.

It says it will adopt the proposals it set out in September to allow a restructure of ITV’s regional news in England and the Scottish borders so ITV can prioritise programming programmes that “audiences value the highest”, such as peak time regional news coverage and original UK content.

It adds the Government should plan an alternative for regional news for the devolved nationals and English regions from 2011. It suggests it could be put out to competitive tender but should preferably have a slot on Channel 3.

Finally, it adds that the second PSB body could play a key role in children’s programming otherwise new funding for children’s programming needs to be considered.

Ofcom will now implement the short-term change to the licences held by ITV, other Channel 3 licensees, C4 and Five and it will continue to look at PSB issues at a local level across all media, including radio. It will also work with the Government and its Digital Britain project, being led by Lord Carter, a about issues surrounding C4. It will also continue

Ed Richards, Ofcom chief executive, says: “The central challenge it how a strong public service broadcasting system can navigate from analogue to digital. Our proposal aim to sustain the quality and creative spirit of PSB while capturing the opportunities of broadband distribution, mobility and interactivity.

“These proposals set out what we believe is required to fulfil a vision of diverse, vibrant and engaging PSB content across a range of digital media.”

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